Air Arabia first quarter profit increases 20% to AED 59 million

Air Arabia has announced its financial results for the three months ending March 31, 2013, demonstrating the airline's strong financial position and outstanding performance.

Air Arabia reported a net profit of AED 59 million for the three months ending March 31, 2013, exceeding analysts’ forecast and registering an increase of 20% compared to AED 49 million in the corresponding quarter in 2012. The airline attributes the impressive growth to its appealing product offering and strong operational performance.

In the first quarter of this year, Air Arabia posted a turnover of AED 722 million, an increase of 22% compared to AED 594 million in the same period of 2012.

Between 1 January 2013 and 31 March 2013, Air Arabia launched non-stop services from its primary hub in Sharjah to four new destinations. In addition, the low-cost pioneer increased frequency of flights from Sharjah to Beirut in Lebanon, Salalah in Oman, and Dhaka in Bangladesh.

Last month, Air Arabia reported that it carried a record 1.4 million passengers in first quarter of this year, the highest number of passengers that the airline handled in a quarter since inception in 2003. The passenger number represents 18% growth compared to the same period last year. The average seat load factor – or passengers carried as a percentage of available seats – stood at an impressive 82%.

“We are delighted to showcase yet another quarter of strong financial and operational performance,” said Sheikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia. “Today’s announcement further demonstrates that Air Arabia continues to set benchmark for the LCC model as well as for the wider aviation sector in the region. For almost a decade we worked tirelessly to offer what our customers– a wide range of destinations at affordable prices.”

He added, “As the airline is on a steady growth trajectory, the sustained profitability and solid growth margins enable Air Arabia to enter new geographies and launch new ventures. As we are soon celebrating our 10th anniversary, we remain committed to deliver exciting travel solutions to millions of passengers every year.”

Analyst Saj Ahmad commented: “"It is evident from Air Arabia's results that the low cost market in the GCC is continuing to show signs of strength and maturity and that is exemplified not just by the increased passenger numbers, but also in profitability too.

“Air Arabia has been the innovator in the market here by being the first true low cost airline, and it comes as little surprise that their regional dominance is translated into a 22% rise in turnover.”

Ahmad concluded: “Going forward, it is difficult to see why the brakes would be applied to Air Arabia. Like its near rival flydubai, the low cost market in the Middle East has decades to go before it either saturates or matures. To that end, we will see Air Arabia expand its network even further, especially in places like Iraq, Iran and Saudi Arabia - these are markets with untapped growth potential and it makes sense for Air Arabia to make a play for market share here."